Growth and Inflation Disparities in Corridor V

Abstract

The paper offers a brief discussion about the role of transport infrastructure in the current growth strategy followed by the European Union. As a corridor is the locus where transport infrastructure and growth should interact more effectively, the central part of the Corridor V is considered as an interesting case study. A growth scenario for eight countries is provided to show that wide growth disparities are to be expected during the next decade. The final part of the paper speculates about inflation differentials that are likely to emerge when growth differentials tend to persist inside a monetary union. As the Euro zone will be enlarged to host fast-growers in Corridor V such as Slovenia (maybe as soon as 2007), Hungary, and the Slovak Republic, growth differentials and the single monetary policy could make it difficult to deliver a common monetary environment.